Liquor licences for online wine sales

Thursday, 27 August, 2009
Danie Cronje, Cluver Markotter
Prospective owners of online wine sales businesses are often not sure whether they require a liquor licence for their business as they will not be selling wine in a tastingroom or wine shop.
According to Danie Cronjé, the Director of Liquor Law at Cluver Markotter Incorporated, the Liquor Act requires a person or company which sells liquor to hold a liquor licence.

As a liquor licence is issued in respect of specific premises the question then arises what premises must be licenced the business. In the case of an online wine sales business it is the administrative office where the administration relating to wine sales takes place.

Cronjé confirms that a number of online wine sales businesses have been licenced in this manner including Winemakers' Choice and BLANKbottle.

The next question that often arises is whether it is necessary to use an office as the premises to be licenced. In many cases the owners of online wine sales businesses conduct businesses from their homes. Cronje confirms that licences have successfully been obtained for online wine sales businesses in respect of the residential properties of the owners.

Although zoning requirements may require owners to apply for permission to conduct businesses from their homes the Liquor Board had issued liquor licences where the applications specifically stated that only administration would conducted on the premises and that no persons would visit the premises for purposes of wine sales and no wine would received, or stored at or dispatched from the premises.

The owners of online wine sales businesses must also be aware that special licence (off-consumption) which will be issued by the Western Cape Liquor Board will only them to sell wine to members of the public. As they have not manufactured the wine themselves they require a registration as a distributor under the national Liquor Act to sell wine to licence holders such as restaurants, liquor stores, pubs, clubs etc.

Under this registration the registrant can include the administrative office of the business as well as all other premises throughout the Republic where liquor is stored or distributed from. If the turnover of the business is less than R5 million a year the onerous requirements of the national Liquor Act regarding commitments to Black Economic Empowerment do not apply.

Cronjé urges persons who wish to obtain special licences for their businesses to apply sooner rather than later as the Western Cape Liquor Act which will come into effect later this year has a number of additional requirements in respect of applications for new licences.

These requirements are expected to increase the cost of applications and will result in applications taking longer to be finalised.